India–UK FTA: From Luxury Cars to Chocolates, Many Goods to Become Cheaper!
New Delhi: During Indian Prime Minister Narendra Modi’s recent visit to the United Kingdom, the India–UK Free Trade Agreement (FTA) was officially signed. This marks a successful conclusion to negotiations that have been ongoing for the past three years.
Experts anticipate that this agreement will generate $34 billion in trade growth annually between the two nations. It is expected to open new avenues for industrial growth, employment, and skilled human capital development.
Key Benefits for India:
- Medical equipment and aircraft spare parts will now be available at lower prices.
- Import duties on British products like chocolates, biscuits, soft drinks, luxury cars, salmon fish, and lamb meat will be reduced from 15% to 3%. For electric cars, the duty will be slashed from 110% to 10%, based on a quota system.
- Import taxes on whisky and other alcoholic beverages will be immediately reduced from 150% to 75%, and gradually brought down to 40% over the next 10 years.
- Indian entrepreneurs and freelancers can now operate in 36 UK service sectors without the need for an Economic Needs Test.
- In 35 sectors, Indian professionals will be allowed to work in the UK for up to two years without the need for a physical office. This will benefit major IT firms like TCS, Infosys, Wipro, and others.
- Indian professionals are exempted from paying UK social security contributions for up to 3 years.
- Professions like chefs, yoga instructors, and musicians will find it easier to access the UK job market.
Key Benefits for the UK:
- Import duties on 90% of goods from India will be reduced immediately. Within 10 years, 85% of Indian goods will receive full duty exemption.
- British companies can participate in non-sensitive Indian government contracts valued over ₹200 crore (₹2 billion).
- The UK will have access to 40,000 Indian government tenders, with a total estimated value of ₹4.09 lakh crore.
- The agreement is expected to create 2,200 new jobs in the UK.
- UK workers may see a salary increase of up to £2.2 billion per year.
- British consumers will benefit from cheaper food, clothing, and footwear, thanks to lower import costs.
Conclusion:
This FTA agreement is considered a landmark step that offers mutual advantages to both India and the UK. It opens up a new chapter in trade, industry, and human resource development. Regions like Coimbatore, Tiruppur, and Karur—India’s industrial hubs—stand to gain significantly from this deal.
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